The government is trying to spend enormous amounts of money as part of its ‘Inflation Reduction Act’ ?
For my part, I will try to eat enormous amounts of food, as part of my ‘Weight Reduction’ program.
Cathy Carron
5 months ago
Biden also has drawn down the Strategic Petroleum Reserve (SPR) solely for political purposes – he needed to keep gas prices from rocketing sky high at least until the mid-terms were over. Biden’s policies have been terrible for the well- being of the country. The Democrats are just banking on the ignorance of their supporters.
Last edited 5 months ago by Cathy Carron
Susan Grabston
5 months ago
The bigget theeat right now is that blithering idiot Janet Yellen has just announced she’s dramatically increasing short-term bond issuance over longer duration. It’s largely to blame for this week’s S&P rally despite obvious signs of recession. It’s going to blow up the edifice. But then the Treasury and Fed are at war. Powell, a republican, is trying to kill the Fed put and get the US back to higher interest eates as the norm. The democrats want a return to MMT, hance “Braindead’s” move out of rhe Fed into government. Two new members of the Fed committee have intellectual focus in reparations, MMT, and Net.Zero …. There is a fight for rhe very soul of US money going on right now in my view. Yellen has several calculations in her decision, but politically.one of them is to force Powell to pivot. A view.
The Democrats can no more effect a “return to MMT” than the GOP can avoid it, since it’s a description of fiat monetary operations in place since the Nixon shock and the abandonment of Bretton Woods with some poorly understood implications for policy space if the general discourse is any indication. It is NOT “spending without constraint” which appears to be what some wish to use it as shorthand for — if anything, MMT is the only economic framework that has a coherent and empirically sound explanation of the price level (that the monopoly issuer sets prices by what it is willing to pay for goods and services — everything else is a relative price story).
Thor Albro
5 months ago
The silver lining is that the more problematic irresponsible deficit spending becomes the more likely the political class will wake up to reality. Cutting up your credit cards is a good first step on the way to solvency.
Mark Goodhand
5 months ago
Our post-gold-standard system of ever-growing debt, unfunded “Ponzi scheme” spending obligations, trade deficits, fiat currencies and fractional reserve banking has always seemed like a house of cards.
I’ve been expecting it to collapse for my entire adult life, but somehow it hasn’t yet.
Maybe there was enough genuine growth to compensate for the absurdities?
Since COVID, politicians on both sides of the Atlantic have seemed determined to push the system beyond breaking point. All part of the Reset plan?
Hardee Hodges
5 months ago
So US debt has become risky thus few buyers at established yields. That ought to send alarms to the Congress. Should a recession take hold things could get quite painful. Maybe the public will awaken in anger and change our leaders. Hope is always there.
Er, there has never been a “failed” US Treasury auction, in no small part because the US Primary Dealers are required by law to bid upon any issuance.
Pip G
5 months ago
I agree increasing the already excessive Government Debt is dangerous. As Interest Rates rise USG must pay out larger $ in interest – yet more Debt. IMO the $ will remain the world’s reserve currency: China, Russia & Iran may adopt a new ‘Dictator Coin’ currency, but financial assets and international trade (think Oil) will still be priced in $. The other risks are devaluation of $ and Financial Repression – USG/ UST keeps Interest Rates lower than Inflation, so transferring wealth from savers to borrowers and reducing the ‘real’ value of Debt.
Samuel Ross
5 months ago
If your foreign policy is to invade a sovereign state on a paper-thin pretext, then yes, America ‘disagrees with your foreign policy’. Much as a police officer disagrees with the policy of the man who robs a house or attacks an innocent man viciously.
The government is trying to spend enormous amounts of money as part of its ‘Inflation Reduction Act’ ?
For my part, I will try to eat enormous amounts of food, as part of my ‘Weight Reduction’ program.
Biden also has drawn down the Strategic Petroleum Reserve (SPR) solely for political purposes – he needed to keep gas prices from rocketing sky high at least until the mid-terms were over. Biden’s policies have been terrible for the well- being of the country. The Democrats are just banking on the ignorance of their supporters.
The bigget theeat right now is that blithering idiot Janet Yellen has just announced she’s dramatically increasing short-term bond issuance over longer duration. It’s largely to blame for this week’s S&P rally despite obvious signs of recession. It’s going to blow up the edifice. But then the Treasury and Fed are at war. Powell, a republican, is trying to kill the Fed put and get the US back to higher interest eates as the norm. The democrats want a return to MMT, hance “Braindead’s” move out of rhe Fed into government. Two new members of the Fed committee have intellectual focus in reparations, MMT, and Net.Zero …. There is a fight for rhe very soul of US money going on right now in my view. Yellen has several calculations in her decision, but politically.one of them is to force Powell to pivot. A view.
The Democrats can no more effect a “return to MMT” than the GOP can avoid it, since it’s a description of fiat monetary operations in place since the Nixon shock and the abandonment of Bretton Woods with some poorly understood implications for policy space if the general discourse is any indication. It is NOT “spending without constraint” which appears to be what some wish to use it as shorthand for — if anything, MMT is the only economic framework that has a coherent and empirically sound explanation of the price level (that the monopoly issuer sets prices by what it is willing to pay for goods and services — everything else is a relative price story).
The silver lining is that the more problematic irresponsible deficit spending becomes the more likely the political class will wake up to reality. Cutting up your credit cards is a good first step on the way to solvency.
Our post-gold-standard system of ever-growing debt, unfunded “Ponzi scheme” spending obligations, trade deficits, fiat currencies and fractional reserve banking has always seemed like a house of cards.
I’ve been expecting it to collapse for my entire adult life, but somehow it hasn’t yet.
Maybe there was enough genuine growth to compensate for the absurdities?
Since COVID, politicians on both sides of the Atlantic have seemed determined to push the system beyond breaking point. All part of the Reset plan?
So US debt has become risky thus few buyers at established yields. That ought to send alarms to the Congress. Should a recession take hold things could get quite painful. Maybe the public will awaken in anger and change our leaders. Hope is always there.
Er, there has never been a “failed” US Treasury auction, in no small part because the US Primary Dealers are required by law to bid upon any issuance.
I agree increasing the already excessive Government Debt is dangerous. As Interest Rates rise USG must pay out larger $ in interest – yet more Debt. IMO the $ will remain the world’s reserve currency: China, Russia & Iran may adopt a new ‘Dictator Coin’ currency, but financial assets and international trade (think Oil) will still be priced in $. The other risks are devaluation of $ and Financial Repression – USG/ UST keeps Interest Rates lower than Inflation, so transferring wealth from savers to borrowers and reducing the ‘real’ value of Debt.
If your foreign policy is to invade a sovereign state on a paper-thin pretext, then yes, America ‘disagrees with your foreign policy’. Much as a police officer disagrees with the policy of the man who robs a house or attacks an innocent man viciously.
That was not the point
I don’t anticipate many readers here will have much that is cogent to say about this, Philip.
Including you, it seems!
Did you have difficulty understanding what I wrote, Mangle?